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The Hong Kong Monetary Authority (HKMA) is to begin a study on the use cases of a central bank digital currency (CBDC).
Hong Kong’s central bank is aiming to “future-proof” the financial center for the growth of CBDCs as part of its “Fintech 2025” strategy, announced Tuesday.
The HKMA has been working with the Bank for International Settlements to research retail CBDCs.
It will now study the benefits and risks of a retail digital Hong Kong dollar, or “e-HKD.”
In CBDC parlance, “retail” refers to a digital currency issued to consumers and businesses directly by the central bank without commercial banks or other entities as intermediaries. In this sense, it would be comparable to digital cash.
“The HKMA will also continue to collaborate with the People’s Bank of China in supporting the technical testing of e-CNY in Hong Kong with a view to providing a convenient means of cross-boundary payments for both domestic and mainland residents,” the announcement said.